How Does Dash Offer Instant & Private Payments? | DASH School #5

Welcome back to your second to last episode of Dash School Congratulations

I'm your teacher, Amanda B Johnson And as promised, yes, I will now tell you everything you need to know about the Masternode You'll likely recall that yesterday I mentioned that the Dash DAO, Decentralized, Autonomous, Organization, was created for two reasons First; to have a way to fund ourselves that would keep us independent and able to cover all of our own expenses And second; was a way to make decisions

We were able to check off the funding box with the treasury, Yes! But the question now remains, how do we make network wide decisions? And who decides where all of those funds from the treasury go anyway That's this one (points to Masternode) See, in the perennial question that decentralized networks all face; which is; Who's in charge when no one in particular is in charge? There's no CEO, there's no president A sort of method has to be invented that would cause us to make the best decisions most of the time Dash's decision makers then are called Masternodes And the reason they are bestowed with the authority to make network wide decisions

is primarily because they each must prove an ownership of a thousand Dash (1000 DASH) With that kind of wealth at stake, we believe the Masternodes to be the most incentivized to make good decisions from which they will profit, and the least likely to make poor decisions from which they will lose And how do the Masternodes make decisions? How do they come to consensus about what will be done on the network? Well, in a way that you're probably pretty familiar with

They vote They cast votes that are recorded directly onto the Dash blockchain, and that's how network wide decisions are made By a majority vote Wild, huh? And in exchange for voting rights, Masternodes must perform three basic tasks They must keep an updated copy of the blockchain at all times, Yup, seems like a good idea, They must provide the network with instant send functionality What? And they also must provide the network with private send functionality

Oh, what are these crazy new terms? Well, I'll tell ya Instant Send and Private Send are two functionalities which set Dash apart from every other blockchain And to understand what they do, and why they are vitally important to the ability to offer "Money as a Service" – "Digital Cash" We've got to go back to the basics you now know about how blockchains work Remember how a blockchain can be visualized by something like this? Time stamped updates to a ledger, right? Well, those updates, as you'll recall, only come through every so often Every number of minutes

Remember from the prior lesson, how when I send digital currency from my wallet My private keys sign a message that broadcasts that transaction to the rest of the network? Well, that "broadcasted" transaction is not considered "confirmed" or irreversible until it's been included in the next block That's why each block that is found after your wallet has broadcast your transaction is called a confirmation So if this was the most recent block found (points) And you sent me 1/2 a Dash, say 20-30 minutes ago, When it was recorded in that block (points) We would say that your transaction of 1/2 Dash from you to me, now has 1, 2, 3, 4, 5 confirmations And that's cool, and that's fine, but guess what? In a real world, person to person retail environment, Waiting for a confirmation that takes minutes is way too long

Hell, even 15 seconds is too long (example) I'm a customer, and my hot latte is in my hand and I'm ready to get out the door, not wait for confirmations And that is why Dash's Masternodes enable Instant Send So that even though our blockchain's confirmations come about every couple or few minutes, a smaller quorum of Masternodes can provide you with an irreversible confirmation in about 13 seconds

Now that's more the speed of paying for coffee and getting out the door And what is that other fancy new fandangled term I referenced before, Private Send? Again, going back to our concept of how a blockchain works, you may have deduced by now that every Dash which exists within the ledger can be traced back to every account that's ever held it And on, and on back to the very first block in which it appeared, when it was a part of the newly created "block reward", remember? And this can create some major problems for we fickle humans For example, remember a few episodes back, when I referenced that perhaps I hate the hypothetical Alice? Well, what if I know what her public address is? Because, maybe she posted it on her twitter? Or, in an email to me once Or hey, maybe I even did business with her once? Well, if you chose to pay me some Dash, to say, pay me back for lunch one day, I would be able to trace those Dash on the blockchain, back to everywhere they've ever been And if the Dash you sent me ever once belonged to Alice, Oh, may the fates have mercy on your soul See, with the fickleness of human nature, plus many people's desire for privacy, It really makes no sense to have digital units of money that have human histories tied to them

This is already the case with everyone's favorite form of money, Cash When someone gives you cash for a good or service, you don't know who owned it before them And what's more, you don't care Because paper cash has a highly desirable property of money, Which is this fancy word called Fungibility Which means that every unit of money is worth the same as every other equal unit of money

Which practically translate into me never being able to insist: I don't want coins from Alice! Send me other coins! They're WORTH more to me! Masternode enabled Private Send, then maintains fungibility by swapping coins among users which breaks the traceable history of coins on the blockchain And now, dear viewer, I almost hate to say it, but you actually now know basically everything you need to know about how Dash uses the blockchain to offer money as a service You know that Dash formed a DAO, Decentralized Autonomous Organization, to be able to fund it's own Miners, Masternodes and have money left over in a Treasury You know that decisions are made in Dash by votes recorded on a blockchain, cast by Masternodes who each own 1000 Dash And finally you know that those Masternodes also perform the oh so important functions for digital cash, Instant Send and Private Send Well, good golly Brothers and Sisters, what could possibly be left? Well, any honest user of blockchain based networks will tell you, that they are not yet easy to use

For example, those alpha numeric addresses, you know, the X175cb whatever, are kinda gross Oh, and did I mention that if you forget your wallet's password, or forget to make a backup, you lose the entire content of your wallet? Oh, and did I mention that payments are kind of hard to make, like if I want to send you some Dash, I have to ask you to copy and paste over your numeric address to me

and then every time I want to pay you thereafter, I have to go digging through our emails or chat history just to find the damn thing Dash realizes that for the average person to want to use a blockchain based digital currency, all of this has got to go Oh, and how do we plan on doing that? What do we think we are? Innovative? Well, it will all be wrapped up in a little software release we like to call Evolution And to find out what Evolution will bring to the table, and why you might care to know about it at this time, tune in to our next and final episode of Dash School (a preview of last episode of Dash School is shown)

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